The Top Vendor Management System Analysis Complications

Executive Summary

  • Vendor management system analysis is often a process that just declares the company is ready for a vendor management system.
  • This article explains the top complications when trying to obtain an unbiased outcome.

Introduction

Procurement software analysis is fraught with complications. In this article, we cover these complications and how we surmount them.

Our References

See our references for this article and related articles at this link.

Complication #1: Selecting a Conflicted System Selection Advisor

This is normally not a mentioned item. However, there is a greater probability that the company will select a financially biased system selection advisor for their readiness assessment that has financial relationships that it does not disclose to you. This means that they will most often rig the software analysis to state that the company is ready for a vendor management system. And of course, if the software vendor recommends the advisor, then the advisor will simply recommend that specific vendor’s vendor management software. It is really just that simple.

Complication #2: Not Questioning The Assertions of Vendors and Consulting Firms

Vendor management software was developed to extend the functionality of procurement software. Procurement software combines a database of vendors and a database of products with the ability to create purchasing documents and associated transactions. Furthermore, ERP systems have always been a liability in purchasing because procurement systems are inherently collaborative, and ERP systems tend to be more about sharing data within the company versus collaborating with customers, suppliers, contract manufacturers, etc.

Vendor management software can be partially covered by the major procurement applications, but it is often that case that these applications are rather light in the vendor management capabilities. Vendor management software means being able to control and perform a detailed anaSupplier Management lysis of one’s vendors, to able to organize, categorize, and check the history of vendor performance, all within the system.

Listening to Whom on Procurement Software?

Software Advice and G2Crowd have coverage of vendor management software. However, they mix in ERP systems like SAP S/4HANA and Microsoft Dynamics, and even warehouse management software which should not be in that category, most likely because of the influence of these vendors or because they are just sloppy. These types of companies use reviews from outside and there is not much evidence that they know that much about the software on which they write articles. G2Crowd even lists Quickbooks as a vendor management system. Remember, most of these online advisory websites like G2Crowd serve as marketing front ends for vendors and are compensated by generating leads.

And it’s not just the advisory firms. We reviewed all of the top articles according to Google on vendor management software, and they all fit into the pattern of repeating mindless assertions. There were no independent articles in the top results. These are the articles potential buyers are reading to determining if they should buy vendor management software for their company?

Complication #3: A New More Sophisticated Vendor Management Process

Most companies that buy vendor management software currently use a combination of an ERP system and spreadsheets to accomplish the task. This means that when looking for vendor management software, the options open up to greatly expand the functionality footprint. This means that unless a company does not already have an ERP system and is migrating from a customized system, the company will need to review its vendor management requirements again. This is because they may have been unnecessarily oversimplified just to make them fit into what the ERP system had to offer.

Conclusion

The software industry is designed to get customers “on the ramp” to implement systems and extract the most out of customers. In nearly all cases, the software analysis provided is just a fake process where the advisor states that the company is ready to move to a system. This is then followed by an exposition of the benefits of that software. This does not have to be the case, and there are many ways of changing this.

How We Do Things Differently

Our vendor management software analysis focuses on what the company is ready for and is not designed to simply onramp people to this software. And unlike all the software advisors, we are a true research entity, and we have no connection to any software vendor. Being dedicated to research means focusing on what is true and using evidence to draw conclusions.